Economics
In recent years China has been importing steel from India. Explain how the import of steel by China will affect.
(a) steel companies in China.
(b) steel companies in India.
(c) industries buying steel for production of other industrial goods in China.
Global & Ind Econ
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Answer
(a) Steel companies in China — Steel from India will be readily available to Chinese companies as per the demand. The transportation cost will also come down due to proximity of two countries. The import of steel from India can create competition for Chinese steel manufacturers.
(b) Steel companies in India — Indian steel manufacturers benefit from exporting to China. If Chinese demand remains strong, Indian companies can expand their exports.
(c) Industries buying steel for production of other industrial goods in China — The raw material will be readily and easily available in China. Industries in China that rely on steel as a raw material for production (e.g., automotive, construction, machinery) may benefit from cheaper steel imports. Lower input costs can enhance their competitiveness.
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